SBI's Rs15,000-cr QIP oversubscribed; government stake dips to 57%

State Bank of India (SBI) on Friday said its Rs15,000-crore qualified institutional placement was oversubscribed with the issue receiving offers exceeding Rs27,000 crore.

And, despite valuation fears, the excess Rs8,0000 crore excess demand helped the issue to be priced at Rs287.25 per share, India's largest bank stated in a release.

The demand, however, came from overseas investors with foreign institutional investors (FIIs) pacing orders in excess of Rs11,000 crore. Domestic institutions placed orders worth Rs8,500 crore.

The QIP will result in the issue of around 522.1 million new shares (at Rs287.25 apiece), resulting in a dilution of government's stake by 6.05 per cent to 57.07 per cent.

Post-issue, the capital to risk weighted assets of the bank will be at 13.64 per cent and CET 1 at 10.20 per cent.

''We have successfully concluded India's largest ever QIP. We launched it on June 5 and closed it on June 8. So, with that we have concluded what I think is the largest fresh equity issuance out of India. It is also the third largest equity offering in 2017 in the entire APAC region,'' said SBI chairman Arundhati Bhattacharya.

She said the QIP funds will keep the bank well financed for at least a year, adding that the bank would have managed even without the latest equity issue and met regulatory requirements up to FY19, including Basel III requirements.

In addition, SBI is planning to unlock value by listing at least the life insurance subsidiary. ''So, to that extent there will be some more (resources) that we will get through our non-core (asset) divestments. And that will add on to this (QIP resources), explained the SBI chief.

In FY18, the bank has estimated growth (in business) of 10-12 per cent and in FY19 it is pegged at 14 per cent.